Reed Hastings is a Wicked Smaht Boston Guy, so a certain strain of repetitive bluster is hard-wired into his DNA. Because he’s also a Show Business Guy, there’s a performative aspect that informs a fair amount of what he says in public, especially when his target audience is Wall Street. When you blend the two characteristics, you get the sort of cyclical boisterousness that’s familiar to anyone who’s ever been surrounded by 18,000 New Englanders chanting “Yankees suck!” at a Bruins game.
Earlier this week, the co-founder, chairman and CEO of Netflix celebrated the company’s “less-bad results” with a brief display of aggro futurism, telling analysts that traditional TV is on a collision course with extinction. “It’s definitely the end of linear TV over the next five, 10 years,” Hastings said during Netflix’s second-quarter earnings call, reiterating a claim he first made eight years ago.
Back in 2014, just a few weeks after Netflix had signed a four-picture, $250 million deal with Adam Sandler, Hastings told The Hollywood Reporter that streaming would replace the moth-eaten TV model. “It’s kind of like the horse, you know, the horse was good until we had the car,” Hastings said. “The age of broadcast TV will probably last until 2030.” At the time, more than a few Wall Street seers appeared eager to endorse Hastings’ prediction, presumably because there was no way for any of them to know that Netflix would go on to pay $70 million for Sandler’s convulsively doltish feature, Hubie Halloween.
As much as safe harbor rules allow executives to pepper their earnings calls with untenable forward-looking statements, Hastings’ conjecture owes more to Mr. Magoo than Nostradamus. Yes, pay-TV is on the ropes—in the last 10 years, the cable/satellite/telco-TV bundle has dwindled to 66.1 million households, driving overall penetration down from 90% of U.S. homes to just 54%—and the impact of what amounts to a mass defection is plain to see in the Nielsen ratings. During the 2021-22 broadcast season, the Big Four’s primetime entertainment series eked out just 652,414 adults 18-49 per airing, which amounts to one-half of 1% of the 130.5 million viewers who are members of the target demo.
Luckily for the networks (and, presumably, anyone who happens to be reading this), sports exist. In 2021, sports accounted for 94 of the 100 most-watched TV broadcasts in the U.S., and the National Football League alone claimed 75 of those top spots. The gulf that separates the NFL and everything else on linear TV is so vast that, were he still alive, the ill-tempered/frequently-pulverized daredevil Evel Knievel would probably try to jump over it on his motorcycle.
That Hastings might have a blind spot when it comes to live sports is understandable, given that Netflix’s stewardship of the genre is limited to that F1 documentary series and that one show about the pill-popping orphan who plays chess. Already saddled with $14.2 billion in debt and $22.8 billion in streaming content obligations, Netflix isn’t in the market for a splashy sports deal—and the company has been consistent in articulating how live events aren’t a great fit for its foundational business model. Staying out of the fray is the smart move for Netflix, as the only top-drawer sports rights that have made the exclusive transition to a streaming platform are those that were roundly rejected by the TV networks.
The bulk of the NFL’s inventory will remain on linear TV through 2033, and the upcoming NBA renewals should ensure that pro hoops will continue on as a broadcast/cable mainstay for the next decade. NBC also has the Olympics nailed down for the next 10 years, and MLB and the NHL have established TV ties through 2028. If Hastings’ dire 10-year forecast is to bear fruit, TV will have to lose the entire NFL package to streaming when the current contracts expire.
While an awful lot can change between now and then, the smart money’s on a hybridized distribution model rather than an extinction-level event. As the NFL’s Brian Rolapp wrote earlier this week, the league’s “mission to reach as many people as possible using the dominant media platforms of the day is the same today as it was” during the Pete Rozelle era. There are 122.4 million households in the U.S. that receive free over-the-air TV, and as much as Netflix wants/needs that base to undergo a forced migration to streaming, the demographics should still work in TV’s favor 10 years from now.
However things shake out, the actuarial tables suggest that Hastings won’t be around to do the Hokey-Pokey on TV’s grave. As much as Americans love to go around declaring legacy forms of media dead like they’re cosplaying Jack Klugman on Quincy, M.E., nothing ever dies. For nearly 25 years, the doomsayers have Chicken Little’d about the death of print, and while magazines and newspapers now only account for 3% of the U.S. ad market, neither is eligible for burial. Same goes for radio, which was supposed to croak 65 years ago, when TV penetration cracked the 80% mark. And yet, radio, however diminished, remains—an $11.5 billion business.
Funny story: Some years ago, a certain business-oriented cable network asked me to weigh in on how TV might possibly survive the imprecations of the DVR era, given the obvious deleterious effects time-shifting has had on commercial impressions. (This was back when the Netflix model consisted solely of mailing hard copies of movies to your house.) So there I sat, in an overheated room in Midtown, with an earbud wedged inside my skull, while one of TV’s many self-appointed pallbearers kept sounding the death knell from a studio in New Jersey.
Doing TV is mostly about smiling blankly at the air in front of you while doing whatever you can to suppress the notion that, all over the nation, strangers are snickering at you. While I’ll readily admit that I don’t exactly have a profound understanding of the present, let alone the not-so-distant future, my argument then was the same as it is now: A decade hence, people will still be watching loads of TV, and sports will be the engine that drives the bulk of that engagement.
While I’m not sure if I won over any of the 287,000 people who were watching the show/using it as background noise, I may have changed the mind of the pundit on the other side of the exchange. About 18 months after I huffily rolled my eyes at the Garden State Cassandra—the media training didn’t stick—the same eminence wound up becoming my boss. Having put in more TV appearances than I’ve had hot meals, the new boss said he’d had no recollection of our televised exchange, although he did reiterate his contention that TV was doomed. He also claimed to have never watched the Super Bowl and said he hadn’t chewed a piece of gum “since 1964.”
Michael Wolff left the magazine after a year, but in short order (and well before he feathered his nest with those political bestsellers), he published a tome titled Television is the New Television: The Unexpected Triumph of Old Media in the Digital Age. I am always right.